Gourmet cupcake shop Crumbs Bake Shop Inc. is closing all stores, including two in Chicago, and ceasing operation following years of financial trouble.

The company was delisted from the Nasdaq Stock Market on July 1 for failure to meet certain financial thresholds, leaving little hope that any stores will reopen. The company confirmed the closings to the Tribune late Tuesday. Crumbs is considering a bankruptcy filing, a spokeswoman told the Tribune.

And there wasn’t much reason for Chicagoans – or anyone else – to choose Crumbs over another cupcake venue, he said. In the gourmet cupcake market, too, he said it’s likely that consumers prefer niche companies with local ties.

And while more cupcake shops opened up in an attempt to capitalize on a short-lived trend, demand for cupcakes has declined.

According to the NPD Group, cupcake sales were up 8 percent in the year that ended April 2011. But sales were down 8 percent in the year that ended April 2014, in this case a lethal blow to the cupcake company that relied on a single core product.

Crumbs’ sales came mostly through its retail stores, with a small percentage coming from Crumbs’ wholesale distribution business, catering services and e-commerce division, a spokeswoman said.

Crumbs became a public company three years ago and posted a net loss of $15.3 million for 2013.

"We have known for quite some time now that we needed to evolve our business model," Crumbs CEO Edward M. Slezak said at the time.

Despite the warning signs, the announcement that all shops have closed seems sudden to customers and employees. Just less than a month ago, Crumbs shops in New York Tri-State Area launched a new breakfast menu and gave away free morning pastries, according to the company’s Twitter feed.

Facebook and Twitter users on Tuesday wondered whether they could still “stock up” by ordering cupcakes on the company’s website. But so far today, the company has made no public comment on the abrupt closings.

Jason and Mia Bauer started the company with a single shop in New York City in 2003 before it merged with 57th Street General Acquisition Corp. in 2011 and went public. It offered 6 cupcakes for $27 on its website and sizes ranging from a 1-inch “taste” to a 6 ½-inch “colossal” cupcake. It also rolled out gluten-free cupcakes in September of last year and presented a new cupcake flavor each week.

“I’m sure they were trying to keep things going,” Garthwaite said. “But given that they’d been delisted seven days before, it shouldn’t have been a complete shock that things weren’t going well. Once that action happens, there’s no way they’ll be around long.”

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